What You Should Know About the Early 2023 Market Rally

[Inside Wall Street with Nomi Prins]( Welcome to Inside Wall Street with Nomi Prins! It’s the only daily newsletter featuring the insights of renowned author and former Wall Street insider, Nomi Prins. Every day, Nomi shines a light on a massive wealth transfer she calls The Great Distortion. That’s the true cause of the permanent disconnect she sees between the markets and the real economy. And she shares ways you can come out ahead, if you know where the money is flowing. You’ll find all Nomi’s Inside Wall Street issues [here](. If you have questions or comments, send Nomi a note anytime [here]( or at feedback@rogueeconomics.com. What You Should Know About the Early 2023 Market Rally By Nomi Prins, Editor, Inside Wall Street with Nomi Prins The S&P 500 (a benchmark for U.S.-listed stocks) is up 5% year-to-date. That’s pretty impressive given that we're just two months into the year. But here’s the curious part. Last month, 82% of the companies in the S&P 500 reported their Q4 2022 earnings. These were down 4.7%. Now, when corporate profits go down it's generally not a catalyst for stocks to surge. But what's even more puzzling is that the riskier and smaller stocks of less established (and often unprofitable) companies have done even better. Far better, in fact. The tech-heavy Nasdaq was up roughly 18% at one point last month. The index remains up 10% at writing. [Featured: Must See! Florida Dad “hacks” gas pump. What happens next will STUN you…]( The Russell 2000, the world’s best-known benchmark for small-cap U.S. stocks, is up 11%. Keep in mind that many companies listed on these two indices aren’t even profitable, making their stocks much more speculative bets. In other words, risky assets are staging a big comeback, even in the face of continued rate hikes from the Federal Reserve. That’s a strange situation… especially when fears that the economy is entering a recession in 2023 remain elevated. You just don’t go all-out in buying stocks at a time like that… let alone buying the riskiest ones. So, today I want to talk about what’s happening here… and what it means for you as an investor. Recommended Link [Strange Force Coming for American’s Savings? (Prepare Now)]( [image]( A strange phenomenon is washing over America… (NOT inflation, rent increases, gas, groceries, political division, or a pandemic) And former Goldman Sachs managing director and best-selling author, Nomi Prins, says: “A reshaping of our global financial system has [ignited a $40 trillion transfer of wealth from the middle class to the rich…]( that could forever split the entire nation into two groups: ‘the new rich’ or ‘the new poor’ – you will have to make a choice.” Because the world’s most powerful groups: MIT, The Gates Foundation, The United Nations, Visa, 77 global Governments, the world’s most powerful group of unelected officials, and a [new Executive Order from President Biden…]( Are igniting a financial event that could soon transfer $40 trillion of middle-class wealth – your savings – funneled to the rich. [Click Here For The FULL Story.]( -- The January Effect The market had a huge rally in January. And while there were a number of factors driving this, much of it was, well… seasonal. This is something you might have heard of… it’s called the “January effect.” It’s a so-called market anomaly where stock prices go up in the first month of the year. In fact, historically, stock market prices have risen more in January than in any other month. You can see this in the next chart, which spans 70 years’ worth of data. [Chart] That’s in part because people sell off their assets in December, so they can close the year claiming a capital loss to reduce taxes. That’s exactly what happened in January of 2023. [Chart] If you look at the chart above, you’ll see how stocks as a group were on an upward trajectory throughout the month, peaking as the month ended. But that still doesn't explain why riskier stock indices have done better than the S&P 500... Recommended Link [How to collect an instant $1,420 – as many times as you like]( [image]( Would you like to know how to generate instant cash from a wide range of stocks… [But without investing a single dime upfront?]( This has nothing to do with dividends... taking out a loan… or anything like that. Best of all, anybody can learn how to do it. It doesn’t matter if you’re retired… or planning to retire. It doesn’t matter if you don’t have millions to invest… What you need is about 3 seconds to execute this simple financial maneuver… And you could be generating $230… $329… even $1,420 or more… In the next hour. [Click here to learn how.]( -- The Market’s Bet It’s because the market believes inflation is going away soon. And if you look at the next chart of the Consumer Price Index (CPI), it certainly seems that way. (The CPI measures changes in the price level of a basket of consumer goods and services.) [Chart] As a reminder, the Fed uses metrics like the CPI to measure inflation and determine economic policy, regardless of whether it’s an accurate measure of the [real inflation]( people experience every day. So with those metrics like the CPI on a downtrend, the Fed is unlikely to continue increasing interest rates for too long. And recession fears are lending more weight to these expectations. [Featured: Strange Force Coming for American’s Savings? (Prepare Now)]( For one, as I told you in my essay on the latest jobs report [yesterday]( the labor market isn't really as robust as it appears to be. And, of course, rising layoffs play a big part in this. Recently, Amazon, Google, Microsoft, and Facebook have all hit workers with big layoffs… In fact, Big Tech has cut more than 330,000 jobs since January last year. A weakening labor market and slowing economy mean less wiggle room for the Fed to continue raising rates aggressively. After all, the central bank doesn't want to have a full-blown economic crisis on its hands. Recommended Link Market Wizard who predicted all indexes would be negative in 2022 shares shocking new forecast: [“Prepare for Five Years of Famine”]( [image]( [Click here for the name of the one ticker you need to protect yourself.]( -- What This Means for Your Money There is an adage: “Don't fight the Fed.” Now, I don’t think investors are wrong about the Fed’s shift to a dovish policy after remaining hawkish throughout 2022… I myself have been talking about the three stages of the Federal Reserve’s pivot to neutral monetary policy since [August](. That said, there’s still a lot of uncertainty in the markets in terms of what the Fed will do at its March 21 meeting. So, my advice for anyone looking to venture into the stock market right now is to tread carefully. That does not mean you should keep all your investments in cash. Instead, I recommend investing a fixed amount of money on a regular basis, typically monthly or bi-weekly. This is what we call “legging in” or “dollar-cost averaging.” You can also buy more when the stock market is cheap and less when it’s expensive. Ultimately, it comes down to another useful mantra: “Time in the markets is more important than timing the markets.” That’s because the longer you stay invested in the market, [the more you increase the odds of making money from it](. That’s regardless of what the Fed does in the short term. One way to take advantage of that is with the Vanguard S&P 500 ETF (VOO). This exchange-traded fund (ETF) tracks the S&P 500 Index. It allows investors to gain broad exposure to the U.S. stock market. It’s a straightforward investment you can access in a regular brokerage account. The fund doesn’t try to outperform the index. Instead, it aims to replicate its performance as closely as possible. Regards, [signature] Nomi Prins Editor, Inside Wall Street with Nomi Prins --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=Inside Wall Street Feedback). --------------------------------------------------------------- MAILBAG In Tuesday’s mailbag, we asked readers if renewable energy is “the only way to achieve true energy independence.” Some like Robert and Nancy feel that nuclear energy is the way to go. Nuclear fusion will provide the energy of the future. Some days we have no wind, and some days the sun doesn’t shine. – Robert B. AOC and her so-called new Green Team don't realize how much land would be required to use solar panels to support a city like New York City. And then there are the wind turbines. Those huge blades that turn only when the wind blows present a problem. Once they need to be replaced, they cannot be used in some other way. They find a huge field in which they can be buried. They do not decompose. So Richard is correct; nuclear power is the way to go. In the meantime, our power grids are in sad shape and are easy to destroy. God Bless America as we need HIS help. – Nancy G. Other readers believe that fossil fuels are necessary and will be vital for at least the next half a century. Sorry, but renewables are too far off in the future to be of any major consequence. Fossil fuels are now vital and will be for the foreseeable future, period. – Thomas M. I would like to address some opinions sent in by another reader regarding renewable energy. She claims China and India have embraced the trend. What facts does she have to back this up? Both those countries are the most prolific polluters on Earth and have been given a pass by the so-called "Paris Climate Accords" as developing countries. Therefore, they are not held to the same standards as the U.S. and others. Give me a break. They will keep on polluting because they have no motivation not to. As far as fossil fuels being finite, we have proven reserves to last at least 200 years, and with improving technology, centuries beyond that. It's dirty to produce. Those batteries that run EVs just come out of thin air, right? The electric grid to power them, where is that coming from? The U.S. produces the cleanest, most efficient oil and gas in the world, and yet the current administration would rather purchase from our enemies who despise us and make them wealthy in the process. Does this really make sense? I am all for wind, solar, and nuclear energy to provide Americans with affordable energy that is kind to the environment. But do we have to declare war on our oil industry to do it? We will need both for the next 50 years or so. – Ted T. Are you with Robert and Nancy that nuclear energy is the way to go? Or are you more with Thomas and think that fossil fuels are still essential? Rather, do you agree with Ted that we need both renewables and fossil fuels for the next 50 years? Write us at feedback@rogueeconomics.com. IN CASE YOU MISSED IT… Expert who called the bottom in March 2020 and June 2022 releases new forecast: [“The Pain Is Only Going to Continue”]( [Click here for the name and ticker of his #1 stock.]( [image]( Get Instant Access Click to read these free reports and automatically sign up for daily research. [An Insider’s Guide to Making a Fortune from Small Tech Stocks]( [The Trader’s Guide to Technical Analysis]( [The Ultimate Guide to Taking Back Your Privacy]( [Rogue Economincs]( Rogue Economics 55 NE 5th Avenue, Delray Beach, FL 33483 [www.rogueeconomics.com]( [Tweet]( [TWITTER]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. 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